Liz Peek: Biden Needs to Stop Playing Hide-and-Seek with Reporters and Do THIS for the Economy
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Instead of playing hide-and-seek with the White House press corps, or whining about Republicans blocking his $5 trillion tax-and-spend scheme, President Joe Biden could be doing something useful.
The president could be working to bring down inflation. How? By getting people back on the job, addressing the supply chain challenges that are increasing the cost of nearly all consumer goods and by doing everything possible to increase U.S. oil and gas output, to help put a lid on fast-rising energy prices.
That’s what Donald Trump would be doing if he were in the White House. Just as he initiated Operation Warp Speed to combat Covid-19, the former president would be laser-focused today on squashing inflation.
For all his faults, Trump was rarely inert.
Unhappily, an administration that identifies climate change as our country’s biggest threat and one that is deep in the pocket of organized labor is unlikely to do any of the above. Biden is determined to put green lobbyists ahead of voters, who rank climate change eighth among their many concerns, behind COVID, poor leadership, race relations, immigration and the economy.
He’s also not going to demand that unions loosen work rules that have our ports operating at 60 percent to 70 percent of capacity or that crimp the number of hours truckers can stay behind the wheel. Some progress has been made on these issues, but not nearly enough.
Biden is also reluctant to take on progressives in the Democrat Party who are intent on removing incentives to work. The damage done by extending extra unemployment benefits, imposing rent moratoriums, increasing food stamps, and forgiving billions in student loans has been well documented. For sure, those policies are keeping workers on the sidelines. Biden’s vaccine mandate and demand that certain jobs be filled only by union workers further shrinks the available labor force.
Reflecting the labor shortage, the most recent employment report showed average hourly earnings rose 0.6 percent month-to-month, or at 4.9 percent annualized, a 40-year high. That is good news, except that the bump in paychecks falls short of inflation. Ed Hyman, a leading Wall Street economist, projects that this week’s consumer price index report will likely show a rise of around 5.35 percent year-to-year, topping wage increases.
To ease ongoing supply chain problems, Biden should bring together union bosses, transportation industry CEOs, medical authorities, and other interested parties to figure out how to unfreeze the clogged-up ports and other bottlenecks that are emptying shelves and causing massive headaches for retailers, builders, and consumers.
According to Beijing’s Global Times, in late July “China Central Television (CCTV)… reported that, since April, freight rates have surged by around five times compared with the same period in 2019.” Container shortages and “falling turnover efficiency in overseas ports” were cited as contributing to the cost surge.
Indeed, our ports are a problem. Just recently, there were 147 ships waiting to be unloaded at the ports in Los Angeles and Long Beach – a record. As ships await their turns, every aspect of the process has been gummed up by union restrictions, Covid protocols and shortages. Truck drivers, chassis, crane operators, warehouse space – everything is in short supply.
In fairness, in late February President Biden commissioned a 100-day assessment of supply chain vulnerabilities, which at least acknowledges the problem. Its June report focused mainly on assuring long-term availability of “green” supplies like batteries for electric vehicles and rare earth minerals, as well as semiconductors and medical supplies.
Those priorities are important but the investments will likely take years to materialize. We need help now.
Just recently, Walmart, Home Depot and other big box retailers decided they were better off chartering small container ships on their own than relying on the vast vessels that are stuck in overburdened ports like Los Angeles. The 1,000-container ships can sail to ports not accessible to the 20,000 unit vessels such importers usually rely on, and can therefore deliver goods faster.
Naturally, bringing items into the country on smaller ships will be more expensive. Retailers will pass the higher costs along to consumers, who, desperate for a new refrigerator or toys for their kids’ Christmas, will have to pony up more.
To help cap gasoline prices, which are currently $3.28 a gallon, up from $2.26 a year ago, President Biden should be encouraging U.S. producers to increase output, which is set to decline this year, instead of begging OPEC for more supplies. He could do that by no longer slow-walking sales of acreage available for drilling, postponing implementation of methane emissions rules on drillers, expediting the construction of new natural gas pipelines and ditching the threat of higher taxes on producers.
There are 533 drilling rigs running today, up from the Covid-depressed 269 a year ago. But we’re nowhere near the level that today’s $75 price tag for West Texas oil should be encouraging. In 2005, when oil prices were roughly today’s level, we had nearly 1,400 rigs operating in the U.S.
Rising energy prices present President Biden with a quandary, especially with a much-ballyhooed global climate gathering just weeks away. The president will almost certainly want to make even more costly promises to limit U.S. emissions and increase our reliance on renewable energy, disregarding the wind power failure that has driven electricity prices to double in the UK and fuel shortages that have led to a 600 percent increase in natural gas prices in France. A crisis that could come to the U.S. if the president has his way.
Inflation is hurting everyone, and most especially the middle and low-income Americans whom Biden pretends to care about. If he wants to prop up his dreadful approval ratings, he should act now to stem rising prices and to show he’s on their side.
Liz Peek is a former partner of major bracket Wall Street firm Wertheim & Company. Follow her on Twitter @lizpeek.